Chapter 16 - Nonbank thrift institutions: Savings and loan associations, savings banks, credit unions, and money market funds. In this chapter you will see how significant thrift institutions are in the functioning of a modern economy and financial system, discover what types of services thrift institutions offer to the public and who their principal competitors are, come to understand the principal differences between major types of thrift institutions as well as their principal similarities and why these differences and similarities are important. | Money and Capital Markets 16 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu Nonbank Thrift Institutions: Savings & Loan Associations, Savings Banks, Credit Unions, and Money Market Funds Learning Objectives To see the significant roles that thrift institutions play in the functioning of a modern economy and financial system. To learn about the types of services that thrift institutions offer to the public and who their principal competitors are. To understand the principal similarities and differences among the major types of thrift institutions. Introduction Nonbank financial institutions play a vital role in the flow of money and credit within the financial system, especially the home mortgage market and the market for personal savings. Recently however, both bank and nonbank financial institutions are “converging” in terms of the services they offer and the markets they . | Money and Capital Markets 16 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu Nonbank Thrift Institutions: Savings & Loan Associations, Savings Banks, Credit Unions, and Money Market Funds Learning Objectives To see the significant roles that thrift institutions play in the functioning of a modern economy and financial system. To learn about the types of services that thrift institutions offer to the public and who their principal competitors are. To understand the principal similarities and differences among the major types of thrift institutions. Introduction Nonbank financial institutions play a vital role in the flow of money and credit within the financial system, especially the home mortgage market and the market for personal savings. Recently however, both bank and nonbank financial institutions are “converging” in terms of the services they offer and the markets they serve. Savings and Loan Associations Savings and loan associations (S&Ls) are among the largest of all thrift institutions, accepting deposits and extending loans and other services primarily to household customers. S&Ls emphasize longer-term loans, especially mortgage loans. Savings and Loan Associations S&Ls began essentially as a single-product industry in the early 19th century, accepting savings deposits from middle-income individuals and families and lending those funds to home buyers. Later, competition from other financial institutions, deregulation, and many failures, forced S&Ls to diversify their operations and aggressively solicit new customers. Savings Institutions Source: Board of Governors of the Federal Reserve System 16 - Savings Institutions $ Billions Total Financial Assets Total Deposits Data Source: Board of Governors of the Federal Reserve System Savings and Loan Associations The size of the savings industry peaked in 1988, when total financial assets reached .
